Robert Halfon: I will pick up on a number of points that have been raised before talking about the main substance of the amendment. A key recommendation of the Sainsbury report, No. 8, stated:
“While it is right for the Institute for Apprenticeships to be delegated wide-ranging autonomy across its operational brief, responsibility for key strategic decisions must be reserved for the Secretary of State. Crucially these decisions include those relating to the shape of the overall national system of technical education”.
The Secretary of State will obviously consult when making her decision, and she needs to ensure that any directions are reasonable and include all relevant factors, which means that the Government consult and listen where appropriate. Under public law duties, a Secretary of State has to act reasonably and fairly.
The hon. Member for Blackpool South mentioned City & Guilds, which stated:
“The City & Guilds Group fully supports the Government’s policy drive to improve the skills of the UK workforce and improve the transition for those entering employment from education and training. We see much merit in the Post-16 Skills Plan, and look forward to continuing to work with the Government and the new IATE to improve the quality and esteem of vocational and technical education in the UK.”
The hon. Gentleman also talked about the timescales. We will publish an implementation plan in due course—a real “due course”—which will set out the timeline for delivering the technical education reform set out in Lord Sainsbury’s independent plan and the Government’s post-16 plan. It will demonstrate firmly how we are to ensure that the institute will be able to deliver its functions according to the plan’s timescales.
As I said all the way through this morning’s sitting, the whole purpose of establishing the Institute for Apprenticeships—now to be the Institute for Apprenticeships and Technical Education—is to give employers a clear and independent voice. I understand that it must be strange at first sight that the Bill gives the Secretary of State powers to issue directions to the institute in respect of its responsibilities for technical education qualifications and the steps towards occupational competence, but the limitation in the amendment is neither necessary nor desirable, and I want to set out why.
I have mentioned Lord Sainsbury, who touched on this again in oral evidence to the Committee. We are including the direction provision in the Bill because it ensures that although the institute has real responsibility for developing and operating the technical education system flexibly, there will be in an overall strategic context guided by the Secretary of State. The Committee might be concerned that we did not include a similar power in respect of apprenticeships and the institute, but the two cases differ substantially. There is a stronger relationship between technical education and the education system as a whole—apprenticeships form part of that—particularly as it relates to young people, than is the case with apprenticeships individually.
To make it clearer, let me describe the circumstances in which we envisage that the direction power may be used. They could include a national requirement for all qualifications taken by 16 to 18-year-old students to include a specific core skill or knowledge. Or they could reflect reforms to other parts of the system, such as a change in the structure of A-levels or in the length of the academic year, which might have a strong impact on the shape of technical education provision. Many issues covered by the directions are likely already to be subject to specific consultation before they are put in place, such as the consultations that take place on A-level subject content. The direction power simply enables the Secretary of State to ensure that her wider policy responsibilities are given effect throughout the system.

Gordon Marsden: We now come to what is essentially the last of the amendments to schedule 1 that we will pursue. It has been designed to broaden both the perspective and the membership of the Institute for Apprenticeships and Technical Education. Although we have dealt in earlier amendments with how apprentices, and indeed students, get recommended, amendment 17 is the most specific.
The Minister will understand that we wish to insert sub-paragraphs (d) and (e) precisely to reflect what he and I have been talking about, which is that the situation of people undertaking FE and technical courses can be somewhat different in outcome and process from that of apprentices. It is important to make that distinction. There is a certain element of déjà vu here, because we discussed the same issue at the start of the year. I will not repeat the whole saga, but before the Government drafted the provision this was very similar wording to that in our model for the new institute. As my hon. Friend the Member for Cardiff West (Kevin Brennan) noted during the passage of the Enterprise Bill 2016, on which he led for the Opposition in Committee, the Institute for Apprenticeships did not—and for that matter does not—have any clear mechanisms for ensuring that apprentices and learners are able to contribute their experiences via the board, or the institute, to inform the work of their new regulator.
In this morning’s sitting the Minister and I discussed the nature of feedback, and it seemed that he thought it was more rigorous than I did, but we will let that pass. However, this is a question not so much of feedback—which is important—as of sending out a sign that there is proper representation. The institute must be broadly based. It cannot simply be employer-led, however important that may be; it should be guided and structured by them, and we will see in due course what the appointments to the board reflect. The idea that there is a board with no apprentice presence on it is as daft as it would have been in the Higher Education and Research Bill to have the office for students without a student representative. In one way, although we can gloss it, it is as simple as that.
From what Peter Lauener said in his oral evidence, and indeed from what the Minister himself has said, appointments to the institute’s board may or may not be imminent, happening in due course, at hand or whatever phraseology we want to use, but I do not think that I can overemphasise how essential it is for it to have wide-ranging representation, to include all the key components of apprenticeship creation and delivery.
I have referred, in relation to previous amendments, to the active participation of various groups of apprentices and their willingness to take up the challenge. These include the National Union of Students, with its own National Society of Apprentices, the Industry Apprentice Council, from whose excellent survey I quoted last week, and other groups such as that of Lindsay McCurdy. After all, in National Apprenticeship Week every year—an offshoot, of course, of the creation of the National Apprenticeship Service under the previous Labour Government—we all go around, as Members of Parliament, shaking hands, having photographs taken and saying how marvellous it is to hear apprentices’ life stories and initiatives. Next year the board will be established and the institute will take a legal rather than shadow form. It would seem odd then to go out and talk to apprentices and students at FE and technical colleges and have them say, “It’s nice that you have come to see us, hear my life story and take my photograph, but why have we got no representation on the board of the institute?” Perhaps the Minister would like to think about that for a moment.
The vision for apprenticeships has become particularly pressing because of the Government’s announcement about including technical education in the institute’s remit. It is important to include the experience of those apprentices and FE students. Perhaps in future—not now, because I appreciate that we are not yet in that situation—it might be appropriate, although for a shorter period, to include the experiences of people undertaking traineeships. Traineeships are an important part of getting people, particularly young people, to the starting post in the first place. That is what we strongly believe needs to be done in this context with amendment 17.
Amendment 32 addresses a slightly different aspect, although it has the same element of transparency. It proposes that the appointments of the chair and the chief executive should be subject to a confirmation hearing by the appropriate Select Committee or Committees of the House of Commons, although there is still some settling down to be done. The Minister will know that in recent years Select Committees have increasingly exercised their powers to interview and have quasi-confirmatory hearings for applicants to key posts in bodies outside Government, such as Ofsted. I say powers, but the situation in this Parliament is not the same as the situation in the US Congress, where there are Senate hearings to confirm the appointment of various key officials, and where the officials, if they are turned down, are not appointed. I will not digress, Ms Dorries, but it will be interesting to see what congressional committees might make of the new President’s cabinet appointments.

Robert Halfon: I thank the hon. Member for Blackpool South for tabling these amendments, particularly amendment 17, which is a very thoughtful amendment. He may be interested to know that even before they were tabled, when we were discussing these matters, I made some of the points that he just made.
Regarding advertising and interviewing for the board members, we have had 281 applications to the board, representing a wide spectrum of apprenticeship experience. I believe that once the board is finalised the hon. Gentleman will be happy with the membership—we have a few rubber stamps to go yet, but I think he will be happy. He will know that the board is responsible for ensuring that the interests of apprentices and students of technical education are well represented.
I have thought about this issue very seriously—long before we discussed it in Committee—but I cannot go so far as to say there should definitely be apprentices on the board. In part that is because board members need to have experience and they carry a great deal of governance responsibility; they also come under press scrutiny, which is not easy. In addition, the board needs to represent the interests of all apprentices of varying levels, ages and sectors, so a single recent apprentice would be unlikely to speak for all apprentices. We do not think that the amendment offers the best way to represent the interests of apprentices and those in technical education.
I think we can square the circle by agreeing that the institute should draw on the experiences of apprentices, so I am pleased to announce that we expect the institute to invite apprentices to establish an apprentice panel, which would report directly to the board. The panel would be made up of apprentices from different occupations and experiences. The panel would decide for itself which issues to focus on, and it will challenge and make recommendations to the board. That squares the difficult circle of wanting experience but also having the vital input from apprentices up and down the country. The Institute for Apprenticeships and Technical Education will ensure that the first panel is in place before the institute goes live in April 2017. The institute will consider how best to engage with apprentices on an ongoing basis and how best to represent technical education students ahead of it taking on that responsibility in April 2018.
I am also pleased to report that there are plans to recruit three apprentices to work at the institute, which will review that number periodically. While I am in this post, I will certainly look at this issue with an eye to expanding the number of apprentices who work for the new institute.
Regarding amendment 32, I understand that it is looking for scrutiny of these crucial appointments—the hon. Member for Luton North spoke about how important these appointments are. However, given the size and scope of the institute, and even after the addition of the new functions in the Bill, I do not agree that the amendment is necessary. Generally, appointments that are subject to confirmation hearings by Select Committees are too much larger organisations. Furthermore, the appointment of the chair is subject to a code of practice set out by the Office of the Commissioner for Public Appointments, as the hon. Gentleman no doubt knows, and is already subject to a high degree of scrutiny.
In line with requirements, the Secretary of State has approved the launch of a recruitment campaign for the chair and the public appointment selection panel. The panel is chaired by a public appointments assessor, and as the appointing Minister I am kept informed every step of the way. A shadow chief executive is in post; the recruitment of the permanent chief executive will follow established civil service rules, with fair and open competition. Also, the Enterprise Act 2016 is clear that the chief executive will first be appointed by the Secretary of State in consultation with the chair and thereafter by the institute itself. The chair and chief executive can of course be called on by the relevant Select Committees to give evidence to Parliament and account for their actions
I do not think the amendment is necessary as I believe that the appointments will be subject to appropriate scrutiny, consistent with established public appointment rules. I hope that the Committee agrees on the need for the institute’s leadership to be established without delay, especially given questions posed by the hon. Member for Blackpool South about the institute’s capacity, whether it will be set up in time, and so on. I hope that the Opposition are sufficiently reassured by that information to withdraw the amendment.

Gordon Marsden: Yes, I thought so, too. May I congratulate my hon. Friend—I think it is the first time she has spoken in Committee—on a lively and inspiring presentation? The issue of careers guidance is not new, but I will not go through its whole history. She was right to make those points, and the examples she gave of what appears to be there in principle but is not in practice were all too symptomatic of the difficulties the Government have had until relatively recently—I will be fair—in addressing the problem.
We had a lengthy period under the coalition Government and even at the start of this one where they were running rapidly to catch up with what had become a disastrous position in careers advice and guidance in schools, with work experience no longer required in the curriculum at key stage 4. An array of organisations—everyone from the CBI to the Federation of Small Businesses—complained and continue to complain. When the Government attempted to respond to some of the many cuts that virtually dismantled much careers advice in local authorities and schools—the Connexions programme was maimed beyond repair—to be fair, for post-24s they did do quite a lot in terms of online guidance and so on, but for under-24s they had done precious little, and my hon. Friend’s investigations suggest that even that is not in the best of nick at the moment, if I can put it that way.
We still await a formal strategy from the Government on careers advice and further reports on how the money allocated to the Careers & Enterprise Company will be spent and distributed. To be fair, as I have said previously, the Careers & Enterprise Company is beginning to do some useful work, but it is hampered by the sheer volume of stuff that needs to be done. The Industry Apprentice Council report to which I have referred previously makes that point as well. My hon. Friend the Member for Batley and Spen is right to raise the issue with the Minister in this way and at this time. As I said, I accept the Minister’s bona fides in this area and his wish to do something about it, but we need to see it taken forward.
New clause 3, in essence, develops some of the issues that we talked about this morning: how we concern ourselves with not only the input to, but the outcomes of, apprenticeships. Historically, a tradition in Governments  of all parties has been to put great emphasis on input, but not always—certainly from a central position—on output. That has been remedied in recent years, and we sometimes have a lot more on output, but output and outcome are not necessarily the same thing. That is one of the things that we want to stress with the new clause.
In broad terms, the Labour party—my Front-Bench and Back-Bench colleagues and I—supports the objective of a major expansion of apprenticeship starts, which the Government have decided to deal with through the target of 3 million starts by 2020. As the Minister rightly said, apprenticeships are vital to bridge the growing skills gap, and the potential expansion might fuel some of the cohorts needed to fill the gaps in technical and professional staff, although other mechanisms can be considered too, as the Minister has observed. The new clause is timely, given the list of the sorts of things —it is not an exhaustive list—we believe would demonstrate the desirable outcomes of apprenticeships.
Despite some progress in recent years, the situation of those young people who remain not in employment, education or training is fragile. The most recent official figures show an increase in the number of 16 to 24-year-olds classed as economically inactive over July to December. That has lifted the number of NEETs to 857,000, an increase of 14,000 on the previous three months and up 3,000 from a year earlier, so we cannot be complacent about the job that still needs to be done to deal with many of the 16 to 24-year-old young people who come into the NEET category. That is one of the reasons why I am encouraged by what the Minister said about how traineeships might be used.
As I said, many commentators, businesses, sector skills people, providers, universities, the public sector, and college heads and staff whom I meet continue to put question marks over the quality of the 3 million new apprenticeships. We have to ensure that the focus for the Government’s potential 3 million starts is high standards, not simply a concentration on meeting target numbers. As the Minister will appreciate, to some extent he is in a no-win situation, because although he can say, “We will do this,” in order to back it up we need robust and developing statistics on outcomes. Only then when the Minister says, “We will do this,” or, “We will improve this,” will people have some facts and figures to signpost the way forward.
Young people themselves are very keen to ensure that their apprenticeships are ones of quality. In the recent Industry Apprentice Council survey, their top ask was to protect quality, because industry apprentices rightly see their apprenticeships as badges of honour, as do their employers. Anyone who participates in any of the events in National Apprenticeship Week will get that sense of pride, even more so if they visit the events related to EuroSkills or WorldSkills, some of which involve apprentices and some of which involve other young people. That sense of pride in quality is really important.
The level of satisfaction with apprenticeships has been high and 2015 showed no change from previous years. Nearly nine in 10 level 2 and 3 apprentices were satisfied with apprenticeships. However, with such an increase in apprenticeships planned, it is extremely important that we monitor that satisfaction rate to ensure that it is not being lost as the Government chase targets.
We also have to be watchful of the fragility of apprenticeship success rates. Those have fallen from 76.4% in 2010-11 to 71.7% in 2014-15. It is reasonable to look at the Government’s own apprenticeship evaluation document in 2015, which shows that eight out of 10 apprentices received formal training either from an external provider or in the workplace. The proportion of higher apprentices receiving formal training had fallen from 84% in 2014 to 79% in 2015. That might appear to be a modest fall, but it is a warning sign, not least because, quite rightly, the Government are putting a lot of emphasis on increasing the number of higher apprentices, with the focus on degree apprenticeships and so on.
Now that we have the new routes and standards for technical education and apprenticeship expansion, I believe it is vital to track the outcomes for each group. As I said, last year’s apprenticeship evaluation showed a slight increase in the proportion that had completed their apprenticeship who were in work compared with 2014. There tend to be higher levels of unemployment among completed apprenticeships in newer frameworks such as ICT, which had 9% unemployment, and arts and media, which had 11% unemployment. Those aspects need to be looked at.
Among the other elements we would like to see in the report, monitoring progression and pay is very important. We had an encouraging announcement in an otherwise fairly arid autumn statement about the rise in the apprenticeship rate. Apprentices have talked about a number of positive impacts in the workplace, but that does not always translate into pay or promotion benefits. Some 46% of apprentices had received a pay rise since completing their apprenticeship and 30% had been promoted. That compared favourably with 2014, when 38% had received a pay rise and 23% had been promoted.
As I have said, there are other things that show how important it is to monitor each of these different areas: appetite for further training; the number of apprenticeships at levels 2 and 3, on which there continues to be a vigorous debate; and the numbers who complete a higher apprenticeship.
The Minister might respond that the Government are already doing some of those things. I accept that they are being done, but only partially. There is no guarantee or obligation yet to say that they are critical to the success of policy. I know that the Minister is concerned to get a step change in the diversity of traineeships, so it would make sense if traineeships were included in that basket of outcomes.
We have touched on a number of the issues raised by new clause 5 under previous amendments. In a sense, it is a further iteration of those. I want to say something about the delivery and progress of standards and the end points. I have raised with the Minister the number of people who currently issue apprenticeship frameworks. I appreciate that that is a process that will ultimately disappear, but it would be helpful to hear from the Minister what the relationship will be between those apprenticeship frameworks and the issuing authorities that take them forward, and the development of new structures of standards at the new institute itself. As I have said, I think there is also significant overlap between what may be done by the institute and what may be done by Ofqual. That is another reason behind new clause 5.
Finally, I will say a few words about some of the issues with the schedule that have been raised with us. The first relates to copyright. Other than having a minor interest, as someone who has written one or two things over the years for which my copyright earns me a few pennies a year from the Authors’ Licensing and Collecting Society, I do not have any specific knowledge or concerns about copyright. However, it is clear from the written submissions that we have received from the Federation of Awarding Bodies, City & Guilds and a number of other organisations that there is a concern.
The Federation of Awarding Bodies is concerned not about the institute approving technical education qualifications, but about the phrase:
“The right or interest in any copyright in a relevant course document is…transferred from the person to the Institute at the time the approval is given.”
It makes the following point:
“There is no mention in either the Sainsbury Report or the Skills Plan of the handing over of copyright to the IATE in documents related to qualifications. The only reference to this requirement is in the Bill.”
It goes on to say:
“We are further concerned that the Bill seeks to give IATE the power to assign or grant a licence of the copyright to any person.”
Without being an expert on copyright, that seems to me to be a pretty sweeping power, and possibly a concerning one. I therefore think it would be appropriate for the Minister—if not this afternoon, perhaps by providing a further note to the Committee—to explain the rationale for granting such a sweeping transfer of copyright when that does not appear to have been an issue in either the Sainsbury report or the skills plan.
The second issue is the restriction of competition between awarding bodies. I say straightforwardly that I entirely accept that the multiplication of awards and standards has been a problem. I think most people understand that. However, the Centre for the Study of Market Reform of Education, City & Guilds and others question whether the proposals go too far.
The NCFE said:
“we have identified a number of issues in the bill which may have unintended negative consequences around a risk of market failure… We also believe, that as currently set out, the bill will restrict opportunities for learners and employers to become involved in providing”.
It is also concerned that each technical level will have only one awarding organisation. It believes, and there is perhaps some reason for saying this, that to have only one awarding organisation offering each technical level qualification occupational route would be unfortunate, but to have two—to adapt the Oscar Wilde saying—would be beneficial, as that would provide competition and enable providers to switch quickly in the event of problems, without having the multiplication issues that have caused problems and difficulties elsewhere. The NCFE also said:
“The current proposals do not seem to recognise the great expertise in designing and assessing Technical and Professional Education qualifications that already exists within Awarding Organisations.”
I am not saying that I necessarily agree with all the points made by the bodies to which I have referred, but I think it would be wise for the Minister to address those issues in some way, shape or form.
The final point, on which I will be brief, is one that we have touched on already, but which I think is still hazy. What will the relationship be between Ofqual and the new institute? Again, I simply refer to what City & Guilds said in its Second Reading briefing and what the Association of Colleges said. The Association of Colleges made the point that paragraph 27 of schedule 1 gives four agencies—IFATE, Ofsted, Ofqual and the office for students—the power to share information with one another, but that raises the issue of the crossover between the agencies. For example, Ofqual, which is very important and has been the subject of great discussion and controversy in recent weeks, regulates English and maths qualifications that will form an important part of technical education programmes regulated by IFATE. The roles of IFATE and the OFS will overlap when it comes to degree apprenticeships. IFATE and Ofsted both have a responsibility for the oversight of apprenticeship training quality.
I am not saying that that is automatically a recipe for confusion, but the Minister will understand that, given those potential overlaps and the potential for choice that that offers people in those areas, in terms of providers or employers—I referred to that earlier as one of the factors that worries me about the capacity issues not being easily determined for the new institute—it would not be unreasonable for him to say a little more about how he and his Department envisage the overlaps being creative rather than chaotic. It would be helpful if the Minister touched on that in his response.

Robert Halfon: I will reflect on what the hon. Gentleman has said. I reiterate the point that a lot of that is done already. We have monthly and annual announcements of all kinds of data to do with apprenticeships and skills. I always ask about destinations because I think they are incredibly important. I am glad that surveys show, for example, that more than 90% of apprentices get into work afterwards, either by staying in place or entering other employment. That is an incredibly important destination statistic.
On new clause 5, the principle of consultation, which we have mentioned quite a lot today, is already a key feature of the current Institute for Apprenticeships. The institute has a statutory duty under the Enterprise Act 2016 to undertake its functions with regard to industry, commerce, finance, the professions and other employers regarding education and training within the institute’s remit. Even more importantly, the institute must also undertake its functions with regard to those who may wish to undertake education and training that is within the institute’s remit—the apprentices themselves.
More specifically, the institute also already has a statutory responsibility to ensure that all draft standards and assessment plans are subject to third-party scrutiny before they can be considered for approval, and it must take account of the findings and conclusions of those carrying out that independent review. The bodies and organisations listed in the new clause are already covered by that existing legislation, and the institute must have regard to them in all functions, not only the specific function set out in the new clause. That approach will also apply to the functions that the Bill plans to give to the expanded IFATE.
The consultative principles that will underpin the institute have already been evidenced. Antony Jenkins, the shadow chair, has held a series of roundtables with a wide range of external organisations to hear how they think the institute should operate. Later this year the shadow institute will publish a full consultation on the operational plan for the institute, setting out its core functions and proposals for how it will deliver them.
The Department also plans to publish a draft for the consultation of a statutory strategic guidance document, which it will issue to the institute next year. That will include the steers that the Government expect the institute to have regard to. It will ensure that the institute consults all those with an interest when carrying out its functions. I therefore hope that the hon. Members will be reassured and will not press the new clauses.
I will come to an overview of schedule 1 but will begin by answering some of the key questions the hon. Member for Blackpool South asked. Although the 19 to 24-year-old NEET figure increased by 0.8% in July to  September, he will know that the overall trend has been down over the years. The figure for 16 to 18-year-olds fell by 1.5% compared with the same quarter in 2015.
The hon. Gentleman also asked about the clarity of a single awarding body—the Wolf report body. Of course, we looked at that but the Wolf report, as the hon. Gentleman will know, identified that a large proportion of vocational qualifications offered very little value to employers, young people and adult learners. The whole purpose is to remove thousands of poor quality qualifications that were not valued by employers.
The proliferation of qualifications was partly down to the awarding organisations’ competition for market share within the existing system. Following Lord Sainsbury’s recommendations, we are bringing the system into line with the best in the world to ensure excellence in technical education provision and having a single awarding body per qualification model. It is strange that the hon. Gentleman should argue for competition while I am doing the opposite but we live in a topsy-turvy world. We are not being driven by competition in the market, with the adverse effects that that brought. Innovation will be driven by the awarding body competition for the market through winning exclusive licences.

So, do we have the leave of the Committee to put the question—after the Minister has spoken—and we have dealt with clause 2, that clauses 3 to 12 stand part of the Bill?

Gordon Marsden: As I was saying, on clauses 2 to 12—we will obviously proceed to the second part of the Bill, which deals, in schedule 3, with the important issue of the new innovation of education administrators—it is important to understand why the Government have to address these issues at this time. The reality is that these insolvency rules are important to protect, above all, students and those in colleges. Colleges are crucial for providing further education nationally and have an important local presence. When colleges have financial difficulties, that can affect many stakeholders, including students, employers, lenders, the funding and oversight bodies and the local communities in which they are situated. Colleges are, quintessentially, locally based and respond to local employment and skill needs. That is why they have been successful over the years in being able to adapt, sometimes in a rather more nimble fashion than universities—although, there are community-based universities that resemble FE colleges in their output and remit more than they do traditional universities.
The reality is that the FE sector has experienced a prolonged period of funding cuts. The House of Commons Library briefing shows the scale of the reduction in funding: in adult further education and skills, funding fell from a 2010 baseline of
“£3.18 billion to £2.94 billion in 2015-16, a reduction of 8% in cash terms or 14% in real terms.”
The financial health of the FE college sector has been declining since 2010-11. There was a deficit in the sector in 2013 for the first time, and 110 colleges recorded an operating deficit. The number of colleges assessed by the Skills Funding Agency as having inadequate financial health rose from 12 to 29 in the same period. That decline in the sector’s financial health is one of the things that has fuelled what the Government have said here today.
We have already referred to the searing report produced by the National Audit Office in 2015, and I do not intend to go into detail on that again. It is obvious, and not an open secret, that the Treasury has insisted on a robust insolvency scheme as part of the quid pro quo for the additional funding that has gone into the sector. That is the reason for the profusion of these clauses in the Bill.

Robert Halfon: Yes, but it is still a Government expenditure item and its aim is to help more people take part in education.
Overall, the Department for Education plans to invest £7 billion in 2016-17 to fund education and training places for 16 to 19-year-olds. The area reviews will support those colleges that want to merge—no one is being forced to merge—and we will provide financial support where appropriate to help them do so. We are  confident about the programme and we will deliver strong, sustainable colleges for the future. Mergers do not necessarily mean that provision in a local area will end. It will be up to the colleges to decide whether to keep a campus or site open.
The clause is probably the least technical of the Bill’s insolvency-related clauses. It explains that part 2 is about the insolvency of further education bodies and, in summarising what is covered by chapters 2 to 7, sets the scene for what we will debate over the coming sittings. Underneath the simple clause is the Government’s commitment to ensuring that every young person has the opportunity to achieve their full potential and to succeed.
The Secretary of State talked about the Government’s commitment to building a further education sector capable of delivering these skills and that is why we are supporting colleges through the area review to take whatever steps are needed to transform themselves into providers of the highest quality teaching. We are providing them with the opportunity to ensure they are in a strong and sustainable financial position for the future.
Once the area review recommendations have been implemented, the Government has been clear that we will no longer provide exceptional financial support to colleges that find themselves in financial difficulties. We will draw a line under what has become an implicit understanding from creditors and some educational institutions that those who fall into extreme financial difficulty will be able to rely on the taxpayer to make good the shortfall.
The provisions in the Bill will send a clear message to colleges that, to deliver excellence in teaching and leadership, they need to ensure that they have strong and robust financial controls in place. The commissioner who gave evidence said that, where there had been significant problems, much had been down to leadership and financial  management. Why is it that so many colleges are doing extremely well, the college of the hon. Member for Blackpool South being an example?
Any college or creditor in extreme financial difficulties cannot look to the Government as the bank of mum and dad for a bail-out. The bank of mum and dad—the taxpayer—will be shut, because we have a duty to give taxpayer value.
Although we expect a college insolvency to be a rare thing, we cannot say it will never happen. That is why the measures the Bill introduces will ensure existing insolvency procedures apply to further education bodies, whereas ordinary insolvency procedures would offer protection only to creditors.
If I summed up this part of the Bill in a few words, it would be about protection, insurance, prudence and caution. Through the Bill we will introduce a special administration regime for the sector that ensures that, in the unlikely event that a college become insolvent, the Secretary of State or Welsh Ministers will be able to take action to protect the interests of the learners.
That is at the heart of the Bill: protecting learners and ensuring that colleges are cautious about borrowing and banks are cautious and prudent about lending. Young people entering a college expect to complete their studies, leaving with the skills that they need to move forward in their lives. That is the purpose of the SAR and I urge that the clause stand part of the Bill.